GAYATRI INFRASTRUCTURE AND DEVELOPMENT PVT LTD,MUMBAI vs. INCOME TAX OFFICER 9(3)(1), MUMBAI, MUMBAI

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ITA 695/MUM/2026Status: DisposedITAT Mumbai29 July 2026AY 2015-20164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was issued beyond the limitation period, rendering the subsequent assessment order void-ab-initio. Consequently, the penalty levied under Section 271(1)(c) also did not survive.

What were the facts?

The assessee's assessment for AY 2015-16 was reopened after the time limit had expired. Notices under Section 148 were issued beyond the permissible period, even after considering the Supreme Court's decisions in Ashish Agarwal and Rajeev Bansal.

What were the issues?

The primary issue was the validity of reopening the assessment beyond the prescribed time limit. A secondary issue was the survival of the penalty if the assessment order was void.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

ITA No. 696/MUM/2025
ITA 695/Mum/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by assessee are directed against the separate orders of ld. CIT(A)/NFAC both dated 13.11.2025 for Assessment Year (AY) 2015-16. In ITA 695/Mum/2026, the assessee has challenged the validity of assessment order passed under section 147 r.w.s. 144. In ITA No. 696/Mum/2026, the assessee has challenged the validity of penalty levied under section 271(1)(c). In both the appeal the facts are common, thus, both the appeals were clubbed together and are decided by common order to avoid the conflicting decisions. Appeal in quantum assessment the assessee has also raised additional ground of appeal that reopening for AY 2015-16 is bad in law being reopening under section 147 beyond the time period of six years.

ITA No. 695 & 696 /Mum/2026 (AY 2015-16) Gayatri Infrastructure and Development Pvt Ltd 2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that reopening under section 147 is bad in law. The case of assessee for A.Y. 2015-16 was reopened after intimation of new regime of reopening of issuing notice under section 148 on 19.04.2021. After the decision of Supreme Court in Ashish Agarwal (2022) 131 taxmann.com 64 (SC), a fresh show cause notice under section 148A(b)was issued to the assessee on 20.05.2022. The assessee has not filed any reply. The AO issued fresh notice under section 148 dated 22.07.2022. The provisions of TOLA are not applicable for AY 2015-16. The time limit of six years expired 0n 31.03.2021. The AO issued notice under section 148 on 22.07.2022 which is in all possible way beyond the time period. Otherwise, as per decision in Union of India Vs Rajeev Bansal (2024) 167 taxmann.com 70(SC), all notices under section 148 for AY 2015-16 will have to be dropped. Thus, notice under section 148 is bad in law and subsequent action initiated thereon is void-ab-initio. The second appeal relates to penalty levied under section 271(1)(c). In case, assessment order is held as void-ab-initio, penalty under section 271(1)(c) will not survive. 3. On the other hand, the learned Commissioner of Income Tax – Departmental Representative (ld. CIT-DR) for the Revenue after going through the initial notice under section 148 dated 19.04.2021, fresh show cause notice under section 148A(b) dated 20.05.2022, and notice 148 dated 22.07.2022 submits that he supports the order of AO and CIT(A). 2

ITA No. 695 & 696 /Mum/2026 (AY 2015-16) Gayatri Infrastructure and Development Pvt Ltd 4. We have considered the submissions of both the parties. We have also deliberated on the decision of Hon’ble Apex Court in Ashish Agarwal (supra) as well as in case of Rajeev Bansal (Writ Tax Appeal No. 1086 of 2022). We find that as per the decision of Hon’ble Apex Court in Ashish Agarwal, the AO was having a surviving period of one day only for issuing fresh notice under section 148. The AO issued notice under section 148 only on 22.07.2022 which is all possible way is beyond the time limit as has been accepted by Union of India in Union of India Vs Rajeev Bansal (supra). Therefore, notice under section 148 dated 22.07.2022 is beyond limitation period. Thereby subsequent action initiated thereto is void-ab-initio. Hence, assessment order passed on the basis of such notice is quashed. In the result, appeal in quantum assessment in ITA No. 6169/Mum/2026 is allowed. Considering the fact that assessment order is quashed, the penalty levied under section 271(1)(c) will not survive. In the result, the penalty levied under section 271(1)(c) is also deleted. 5. In the result, both the appeals of the assessee are allowed. Order was pronounced in the open Court on 29/07/2026.

/- Sd/- S/- SSd/-SSSd/-d/- OM PRAKASH KANT PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 29/07/2026 Biswajit

ITA No. 695 & 696 /Mum/2026 (AY 2015-16) Gayatri Infrastructure and Development Pvt Ltd

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By Order

Assistant Registrar ITAT, Mumbai

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